Identifying the impacts of trading construction waste across jurisdictions: a simulation of the Greater Bay Area, China, using non-linear optimization

Local authorities worldwide are actively encouraging waste material trading within their jurisdictions as a promising strategy to develop a more circular economy. Construction activities consume natural resources intensively and generate massive solid waste. With proper ex-post treatment, the waste materials can be recycled or even directly reused, hence contributing to the circular economy. Using the Hong Kong-Macao-Guangdong Greater Bay Area (GBA) as the context, we simulate the impacts of a construction waste trading market on the waste flows and the resulting monetary exchanges. Our model views each city as a representative agent that maximizes the benefit of conducting waste recycling. The interactions of their profit-seeking behavior will lead to optimized overall social costs. We then solve this problem using a non-linear optimization algorithm. The simulation shows that with a fully operational market, the traded waste materials amount to 1253.84 million m³, covering 82.36% of GBA's total construction waste generation in a typical year. The monetary transactions equal to US$38.41 billion. Such huge payments present a great opportunity for the GBA cities to develop their recycling industries. In addition, we argue that although increasing public pressure is effective in reducing inequalities in the final waste distribution, it also results in fewer financial transactions flowing to less-developed cities, which reduces their funding for developing the circular economy.